Loading...
HomeMy WebLinkAbout17-513 PendrakSTATE ETHICS COMMISSION 309 FINANCE BUILDING P.O. BOX 11470 HARRISBURG, PA 1 71 08 -1 470 (717) 783 -1610 1- 800 -932 -0936 ADVICE OF COUNSEL March 20, 2017 To the Requester: Mr. Matthew D. Pendrak Dear Mr. Pendrak: 17 -513 This responds to your letter dated January 11, 2017, by which you requested an advisory from the Pennsylvania State Ethics Commission ( "Commission "). Issue: Whether the Public Official and Employee Ethics Act ( "Ethics Act "), 65 P-a-T-S. § 1101 et seg., would impose prohibitions or restrictions upon an individual serving as a township supervisor, who is also a township employee, with regard to performing electrical work for the township either as a township employee or in his private capacity as a licensed master electrical contractor /owner of an electrical services business. Facts: You request an advisory from the Commission based upon submitted acs hat may be fairly summarized as follows. You are a Supervisor for Jefferson Township ( "Township "), located in Lackawanna County, Pennsylvania. You are also a Township employee. In a private capacity, you are a licensed master electrical contractor and the owner of an electrical services business ( "the Electrical Services Business "). Based upon the above submitted facts, the question that is presented is whether the Ethics Act would impose prohibitions or restrictions upon you with regard to performing routine electrical maintenance upgrades, electrical repairs, or emergency electrical work for the Township. As it is unclear from your request letter whether you would do such work as a Township employee or in your private capacity as a licensed master electrical contractor /owner of the Electrical Services Business, this Advice shall address both possibilities. Discussion: It is initial) noted that pursuant to Sections 1107(10) and 1107(11) of the Ethics Act, 65 Pa.C.S. y§§ 1107(10), (11), advisories are issued to the requester based upon the facts that the requester has submitted. In issuing the advisory based upon the facts that the requester has submitted, the Commission does not engage m an independent investigation of the facts, nor does it speculate as to facts that have not been submitted. It is the burden of the requester to truthfully disclose all of the material FAX: (717) 787 -0806 0 Web Site: www.ethics.state.pa.us 0 e -mail: ethics @state.pa.us V ndrak, 17 -513 rc � 20 2017 Page 2 facts relevant to the inquiry. 65 Pa.C.S. §§ 1107(10), (11). An advisory only affords defense to the extent the requester has truthfully disclosed all of the material facts. As a Township Supervisor, you are a public official subject to the provisions of the Ethics Act. Sections 1103(a) and 11030) of the Ethics Act provide: §'1103. Restricted activities (a) Conflict of interest. - -No public official or public employee shall engage in conduct that constitutes a conflict of interest. 0) Voting conflict.- -Where voting conflicts are not otherwise addressed by the Constitution of Pennsylvania or by any law, rule, regulation, order or ordinance, the following procedure shall be employed. Any public official or public employee who in the discharge of his official duties would be required to vote on a matter that would result in a conflict of interest shall abstain from voting and, prior to the vote being taken, publicly announce and disclose the nature of his interest as a public record in a written memorandum filed with the person responsible for recording the minutes of the meeting at which the vote is taken, provided that whenever a governing body would be unable to take any action on a matter before it because the number of members of the body required to abstain from voting under the provisions of this section makes the majority or other legaily required vote of approval unattainable, then such members shall be permitted to vote if disclosures are made as otherwise pprovided herein. In the case of a three - member governing body of a political subdivision, where one member has abstained from voting as a result of a conflict of interest and the remaining two members of the governing body have cast opposing votes, the member who has abstained shall be permitted to vote to break the tie vote if disclosure is made as otherwise provided herein. 65 Pa.C.S. §§ 1103(a), (j). The following terms related to Section 1103(a) are defined in the Ethics Act as follows: § 1102. Definitions "Conflict" or "conflict of interest." Use by a public official or public employee of the authority of his office or employment or any confidential information received through his holding public office or employment for the private pecuniary benefit of himself, a member of his immediate family or a business with which he or a member of his immediate family is associated. The term does not include an action having a de minimis economic impact or which affects to the same degree a class consisting of the general public or a subclass consisting of an industry, occupation or other group which includes the public official or public employee, a member of his immediate family or a business Pendrak, 17 -513 March 2 , 2017 Page 3 with which he or a member of his immediate family is associated. "Authority of office or employment." The actual power provided by law, the exercise of which is necessary to he performance of duties and responsibilities unique to a particular public office or position of public employment. "Business." An corporation, partnership, sole proprietorship, firm, enterprise, franchise, association, organization, self - employed individual, holding company, joint stock company, receivership, trust or any legal entity organized for profit. "Business with which he is associated." Any business in which the person or a member of the person's immediate family is a director, officer, owner, employee or has a financial interest. "De minimis economic impact." An economic consequence which has an insignificant effect. 65 Pa.C.S. § 1102 Subject to the statutory exclusions to the Ethics Act's definition of the term "conflict" or "conflict of interest," 65 Pa.C.S. § 1102, a public official /public employee is prohibited from using the authority of public office /employment or confidential information received by holding such a public position for the private pecuniary benefit of the public official/public employee himself, any member of his immediate family, or a business with which he or a member of his immediate family is associated. In each instance of a conflict of interest, the public official/public employee would be required to abstain from participation. The abstention requirement would not be limited merely to voting, but would extend to any use of authority of office including, but not limited to, discussing, conferring with others, and lobbying for a particular result. Juliante, Order 809. Subject to certain statutory exceptions, in each instance of a voting conflict, Section 11030) of the Ethics Act would require the public official/public employee to abstain and to publicly disclose the abstention and reasons for same, both orally and by filing a written memorandum to that effect with the person recording the minutes. One of the exclusions to the statutory definition of "conflict" or "conflict of interest," referred to herein as the "de minimis exclusion," precludes a finding of conflict of interest as to an action having a de minimis (insignificant) economic impact. Thus, when a matter that would otherwise constitute a conflict of interest under the Ethics Act would have an insignificant economic impact, a conflict would not exist and Section 1103(x) of the Ethics Act would not be implicated. See, Kolb, Order 1322; Schweinsbur , Order 900. The Commission has determined tie applicability of the de mmimis exc usion on a case -by -case basis, considering all relevant circumstances. In the past, the Commission has found amounts up to a proximately $1,200 to be de minimis. See, Fidler, Order 1637. You are cautioned that the economic impact of an individual's conU—uct may aggregate over time, rather than be limited to a particular increment of time such as a month or year. Confidential Opinion, 05 -001; Corey, Opinion 13 -006; Mann, Opinion 14 -003. Section 1103(f) of the Ethics Act, pertaining to contracting, provides as follows: § 1103. Restricted activities Pendrak, 17 -513 a�H-20, 2017 Page 4 (f) Contract. - -No public official or public employee or his spouse or child or any business in which the person or his spouse or child is associated shall enter into any contract valued at $500 or more with the governmental body with which the public official or public employee is associated or any subcontract valued at $500 or more with any person who has been awarded a contract with the governmental body with which the public official or public employee is associated, unless the contract has been awarded through an open and public process, including prior public notice and subsequent public disclosure of all proposals considered and contracts awarded. In such a case, the public official or public employee shall not have any supervisory or overall responsibility for the implementation or administration of the contract. Any contract or subcontract made in violation of this subsection shall be voidable by a court of competent jurisdiction if the suit is commenced within 90 days of the making of the contract or subcontract. 65 Pa.C.S. § 1103(f). The term "contract" is defined in the Ethics Act as follows: § 1102. Definitions "Contract. " An agreement or arrangement for the acquisition, use or disposal by the Commonwealth or a political subdivision of consulting or other services or of supplies, materials, equipment, land or other personal or real property. The term shall not mean an agreement or arrangement between the State or political subdivision as one party and a public official or public employee as the other party, concerning his expense, reimbursement, salary, wage, retirement or other benefit, tenure or other matters in consideration of his current public employment with the Commonwealth or a political subdivision. 65 Pa.C.S. § 1102. Section 1103(f) does not operate to make contracting with the governmental body permissible where it is otherwise prohibited. Rather, where a public official /public employee, his spouse or child, or a business with which he, his spouse or child is associated, is otherwise appropriately contracting with the governmental body, or subcontracting with any person who has been awarded a contract with the governmental body, in an amount of $500.00 or more, Section 1103(f) requires that an open and ublic process" be observed as to the contract with the governmental body. Section 1103(f) of the Ethics Act also provides that the public official /public employee may not have any supervisory or overall responsibility as to the implementation or administration of the contract with the governmental body. In ap lying the above provisions of the Ethics Act to the instant matter, you are advised as follows. The Electrical Services Business is a business with which you are associated in your capacity as the owner. V ndrak, 17 -513 —rc 2 ' 2017 Page 5 Subject to the statutory exclusions to the definition of "conflict or "conflict of interest" as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(x) of the Ethics Act, you would have a conflict of interest as a Township Supervisor in matters that would financially impact you or the Electrical Services Business. If electrical work would be performed for the Township as a Townshi p employee: Section 1103(a) of the Ethics Act would not prohibit you from performing electrical work for the Township as a Township employee. However, if you would receive compensation beyond your regular Township employee compensation as a result of performing electrical work, such as overtime pay, Section 1103(a) of the Ethics Act would prohibit you from using the authority of yyour public office as a Township Supervisor to obtain such compensation (such as by authorizing yourself to do the work) unless the amount of compensation would be so small as to fall within the de minimis exclusion. When the de minimis exclusion would not be applicable, only other Supervisor(s) without a conflict of interest would be able to authorize the work to be performed and to authorize payment to you. In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. If electrical work would be performed for the Township outside the scope of your Towns 1p emp oymenf: An agreement or arrangement whereby you/the Electrical Services Business would perform electrical work for the Township in a private capacity would constitute a "contract" as that term is defined in the Ethics Act. As long as the restrictions and requirements of the Ethics Act would be observed, the Ethics Act would not prohibit you/the Electrical Services Business from contractually performing electrical work for the Township. However, in your public capacity as a Township Supervisor, you generally would have a conflict of interest under Section 1103(x) of the Ethics Act in matters pertaining to actual or anticipated contract(s) between the Township and you /the Electrical Services Business. When the de minimis exclusion would not be applicable, only other Supervisor(s) without a conflict of interest would be able to authorize the work to be performed and to authorize payment for the work. You would have a conflict of interest with respect to voting to approve the payment of compensation to you or to the Electrical Services Business for performing electrical work for the Township if the de minimis exclusion would not be applicable. You would also be prohibited from using the authority of your public position, or confidential information accessed or received as a result of being a Township Supervisor, to effectuate a private pecuniary benefit to you/the Electrical Services Business through a detriment to a business competitor. See, Pepper, Opinion 87008. In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. The restrictions and requirements of Section 1103(f) of the Ethics Act would have to be observed as to an yy contract between you/the Electrical Services Business and the Township that would be valued at $500 or more. See, Kistler v. State Ethics Pendrak, 17 -513 aiCI rcF-2-0, 2017 Page 6 Commission, 610 Pa. 516, 22 A.3d 223 (2011), regarding the requirements for an "open and public process. ") The propriety of the proposed conduct has only been addressed under the Ethics Act; the applicability of any other statute, code, ordinance, regulation or other code of conduct other than the Ethics Act has not been considered in that they do not involve an interpretation of the Ethics Act. Specifically not addressed herein is the applicability of the Second Class Township Code. Conclusion: Based upon the submitted facts that: (1) you are a Supervisor for Jefferson Township ( "Township "), located in Lackawanna County, Pennsylvania; (2) you are also a Township employee; and (3 in a private capacity, you are a licensed master electrical contractor and the owner oT an electrical services business ( "the Electrical Services Business "), you are advised as follows. As a Township Supervisor, you area public official subject to the provisions of the Public Official and Employee Ethics Act "Ethics Act "), 65 Pa.C.S. § 1101 et sec . The Electrical Services Business is a business with which you are associated in your capacity as the owner. Subject to the statutory exclusions to the definition of "conflict" or "conflict of interest" as set forth in Section 1102 of the Ethics Act, 65 Pa.C.S. § 1102, pursuant to Section 1103(a) of the Ethics Act, you would have a conflict of interest as a Township Supervisor in matters that would financially impact you or the Electrical Services Business. If electrical work would be performed for the Township as a Township employee: Section 1103(a) of the Ethics Act would not prohibit you from performing electrical work for the Township as a Township employee. However, if you would receive compensation beyond your regular Township employee compensation as a result of performing electrical work, such as overtime pay, Section 1103a) of the Ethics Act would prohibit you from using the authority of your public office as a Township Supervisor to obtain such compensation (such as by authorizing yourself to do the work) unless the amount of compensation would be so small as to fall within the de minimis exclusion. When the de minimis exclusion would not be applicable, only other Supervisor(s) without a conflict of interest would be able to authorize the work to be performed and to authorize payment to you. In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. If electrical work would be performed for the Township outside the scope of your Township employment. An agreement or arrangement whereby you/the Electrical Services Business would perform electrical work for the Township in a private capacity would constitute a "contract" as that term is defined in the Ethics Act. As long as the restrictions and requirements of the Ethics Act would be observed, the Ethics Act would not prohibit you/the Electrical Services Business from contractually performing electrical work for the Township. However, in your public capacity as a Township Supervisor, you generally would have a conflict of interest under Section 1103(a) of the Ethics Act in matters pertaining to actual or anticipated contract(s) between the Township and you/the Electrical Services Business. When the de minimis exclusion would not be applicable, only other Supervisor(s) without a conflict of interest would be able to authorize the work to be performed and to authorize payment for the V ndrak, 17 -513 rc 0, 2017 Page 7 work. You would have a conflict of interest with respect to voting to approve the payment of compensation to you or to the Electrical Services Business for performing electrical work for the Township if the de minimis exclusion would not be applicable. You would also be prohibited from using the authority of your public position, or confidential information accessed or received as a result of being a Township Supervisor, to effectuate a private pecuniary benefit to youlthe Electrical Services Business through a detriment to a business competitor. In each instance of a conflict of interest, you would be required to abstain from participation, which would include voting unless one of the statutory exceptions of Section 11030) of the Ethics Act would be applicable. Additionally, the disclosure requirements of Section 11030) of the Ethics Act would have to be satisfied in the event of a voting conflict. The restrictions and requirements of Section 1103(f) of the Ethics Act would have to be observed as. to any contract between you /the Electrical Services Business and the Township that would be valued at $500 or more. Lastly, the propriety of the proposed conduct has only been addressed under the Ethics Act. Pursuant to Section 1 107(11) of the Ethics Act, an Advice is a complete defense in any enforcement proceeding initiated by the Commission, and evidence of good faith conduct in any other civil or criminal proceeding, provided the requester has disclosed truthfully all the material facts and committed the acts complained of in reliance on the Advice given. This letter is a public record and will be made available as such. Finally, if you disagree with this Advice or if you have any reason to challenge same, you may appeal the Advice to the full Commission. A personal appearance before the Commission will be scheduled and a formal Opinion will be issued by the Commission. Any such appeal must be in writingg and must be actual) received at the Commission within thirty (31 days of the date of this Advice pursuant to 51 Pa. Code § 13.2(h). The : appeal may be received at the Commission by hand deliverryy, United States mail, delivery service, or by FAX transmission (717 - 787-- 0806j. Failure to file such an appeal at the Commission within thirty (30) days may result in the dismissal of the appeal. Sinc rely, Ma Wk" Robin M. Hittie Chief Counsel